We feel now is a pretty good time to analyse Magna Mining Inc.'s (CVE:NICU) business as it appears the company may be on the cusp of a considerable accomplishment. Magna Mining Inc. engages in the acquisition, exploration, and development of mineral properties in Canada. The CA$111m market-cap company posted a loss in its most recent financial year of CA$9.9m and a latest trailing-twelve-month loss of CA$11m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Magna Mining's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Magna Mining

Expectations from some of the Canadian Metals and Mining analysts is that Magna Mining is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of CA$17m in 2025. The company is therefore projected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 95%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Magna Mining's upcoming projects, however, keep in mind that by and large a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Magna Mining currently has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Magna Mining which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Magna Mining, take a look at Magna Mining's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Historical Track Record: What has Magna Mining's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Magna Mining's board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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